Final answer:
To determine if it was better to be a borrower or a lender in specific years, one should compare the mortgage interest rate to the inflation rate for those years. This analysis would reveal which party benefited more financially during those periods. Shifts in the banking industry and reduced lending restrictions have also influenced this dynamic.
Step-by-step explanation:
When analyzing whether it would have been better to be a person borrowing money from a bank to buy a home or better to be a bank lending money, one needs to consider the mortgage interest rate in relation to the rate of inflation for those years.
If the interest rate on the mortgage was lower than the rate of inflation, it would have generally been more advantageous for the borrower since the real cost of the loan would be decreasing over time. Conversely, if the interest rate was higher than the inflation rate
it would typically favor the lender, as the value of the money being repaid would be higher in real terms. Analyzing Table 19.11 or Table 6.11, which provides a list of these rates over various years, would reveal in which years borrowers or lenders had the advantage.
In the early twenty-first century, a shift from local banks to various financial institutions handling home loans occurred. With reduced restrictions on lending and political pressure, the landscape of borrowing significantly changed. Furthermore, the health of this mortgage system was supposed to be regulated by the government